Business Rates Newsletter

Introduction

The Finance Secretary, Derek Mackay, outlined new proposals in his previous Budget and the statutory instruments have now been prepared on the changes which will be implemented as from 1 April 2018 and beyond.

The budget, with the support of the Green Party, has now been passed with further finance being available to the Local Authorities.

The principal proposed changes to Business Rates are as follows:-

Business Rates

The business rates uplift (i.e. the rate poundage) has been confirmed as being limited to the CPI measure of inflation rather than RPI Index which has been adopted in the past. The CPI Index has historically been at a lower level.

The poundage rate for properties with a rateable value below RV £51,000 will be 0.48p per 2018/19. The supplement for those properties above RV £51,000 will be 2.6p i.e. 50.6p.

A Business Growth Accelerator

– Rates relief will be available where the refurbishment or expansion of one or more buildings, or part of a building, are undertaken

– Rates relief will be granted on the erection or construction of one or more new buildings, or part of an existing building, which forms part of an existing building. This relief will not be available where a property has undergone a change of use, a combination or division or reorganisation of an existing property

Rates Relief

Rates relief will be available as outlined below:-

Vacant Rates

Currently, industrial properties obtain 100% rates relief for six months and 10% rates relief thereafter.

Commercial properties obtain 50% relief if unoccupied for a continuous period of three months and thereafter 10% relief.

Under Fresh Start Relief, businesses who occupy long term empty properties may be entitled to a 100% business rates discount for the first year they occupy the premises. This has been increased from the current 50% relief. The property must have been previously empty for at least 6 months and has a rateable value under £65,000. The period of vacancy required had previously been 12 months. This relief has been extended to all property types including industrial.

Nursery Schools

As from 1 April 2018 all day nurseries will obtain 100% business rates relief. This will be application based with forms available from each Finance Department. This relief will remain in place until 31 March 2021.

Private School Relief

It has been confirmed that the existing 80% rates relief will be removed from private schools as from 1 April 2020. Legislation has not been finalised as yet.

Rating Revaluation

It is now confirmed that regular revaluations will be at three yearly intervals, subsequent to the next revaluation which will be in 2022.

Transitional Relief

This will be restricted to properties with a value below £1.5 million. 2018/19 bills for hospitality subjects will rise by no more than 12.5% in real terms, 15.88% in cash terms. This is application based to the local Finance Department.

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